The complaints allege that the insider trading scheme involved information in pharmaceutical companies, Elan Corporation and Wyeth, between the summer 2006 and mid-July 2008.

The DOJ's complaint alleges that Martoma got access to negative confidential Alzheimer's disease drug trial information, which caused the hedge fund to dump its 10.5 million share position in Elan and 7 million shares in Wyeth. The hedge fund then shorted those stocks betting that the price would decrease, the complaint said.

"As Martoma allegedly got sneak peeks at drug data, he first recommended that the hedge fund build up a massive position in Elan and Wyeth stock, and then caused the fund to shed those shares after getting a secret look at the unexpectedly bad results of a clinical drug trial. And so, overnight, Martoma went from bull to bear. As a result of the blatant corruption of both the drug research and securities markets alleged, the hedge fund made profits and avoided losses of a staggering $276 million, and Martoma himself walked away with a $9 million bonus for his efforts," U.S. Attorney Preet Bharara said in a statement.

During a press conference today, Bharara said this case has "no historical precedent."

"Today’s record-setting insider trading case reinforces the cold, hard lesson of so many other recent cases that when you trade on inside information, you’re not just betting your money but also your career, your reputation, your financial security, and your liberty. Now, yet another corrupt hedge fund manager has learned the high cost of ignoring that lesson," Robert Khuzami, Director of the SEC's Division of Enforcement said in a statement.

Meanwhile, The FT's hedge fund correspondent Sam Jones Tweeted that Martoma's lawyer said, "Mathew was an exceptional pm who succeeded through hard work and the dogged pursuit of information in the public domain."